A report by the think tank SBM Intelligence has revealed that only five states in Nigeria can sustain themselves without allocations from the federation accounts.
The states were listed as Anambra, Cross Rivers, Lagos, Ogun and Rivers.
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It was noted that between January and October, 2024, only five states listed above could survive their fiscal needs without allocation from the federally distributed revenue.
In the area of Value Added Tax, it was further stated in the report that many states in the country earn more revenue from value added taxation than they actually generated.
For instance, it was noted that Imo State got 1715% of what it generated as Value added tax between January and October 2024, Abia, Cross Rivers, and Kebbi were all said to have received 700% of their contribution into the VAT pool.
Lagos and Rivers were Said to have received the lowest VAT allocation.
It was stated that Lagos got 16.76% VAT, while Rivers state got 22%.
The report argued that the proposed tax reforms by President Tinubu fail to account for uniqueness of certain regions.
“In the Northeast, states received 244.6% of their VAT contributions. The highest was Bauchi which received 384.94% of its VAT contributions and the lowest was Adamawa which received 165.69% of its VAT contributions. This could excarbate existing economic disparities” the statement noted
There have been disagreements over the new tax reforms. Northern state governors for instance argue that this reform would harm the economic balance of the region.
There have also been calls for wider consultations before the passage of the bill is done by the Nigerian lawmakers.
Naijalamp.com